Soligenix has granted SciClone exclusive licensing rights for the Phase II oral mucositis candidate SGX942 (dusquetide) in China, including Hong Kong and Macau, as well as Taiwan, South Korea, and Vietnam, the companies said today.

Only the deal’s upfront value has been disclosed. SciClone has agreed to make a $3 million upfront equity investment in Soligenix for 3,529,412 shares of Soligenix common stock, according to the companies.

SciClone will be responsible for all aspects of development, product registration, and commercialization in countries covered by the licensing agreement.

Under that agreement, SciClone will be allowed to develop, promote, market, distribute, and sell SGX942, an innate defense regulator indicated for oral mucositis in patients with head and neck cancer. In return for its exclusive rights, SciClone agreed to pay Soligenix royalties on net sales. Soligenix agreed to supply the commercial drug product to SciClone on a cost-plus basis, while maintaining worldwide manufacturing rights.

The agreement expands upon an existing collaboration between the companies, in which SciClone provided its complete oral mucositis clinical and regulatory data library to Soligenix in exchange for previously undisclosed commercialization rights to SGX942 in the Greater China market.

By analyzing data available from the placebo subjects in the SciClone trials, the companies said, Soligenix acquired “essential” insight into disease progression, along with quantitative understanding of its incidence and severity in the head and neck cancer patient population.

That information helped shape the design of a Phase II clinical trial, for which positive preliminary efficacy and safety results were announced in December 2015. At a dose of 1.5 mg/kg, SGX942 decreased the duration of severe oral mucositis by 50% overall, from 18 days to 9 days, compared to the placebo group. In patients receiving the most aggressive concomitant chemotherapy, the reduction was 67%, from 30 days to 10 days.

SGX942 remains the subject of an ongoing multicenter, double-blind, placebo-controlled, Phase II clinical study. Completion of long-term follow-up is expected by the end of 2016, the companies said.

SGX942 was developed based on discoveries by Professors B. Brett Finlay, Ph.D., and Robert Hancock, Ph.D., of the University of British Columbia.

“We believe that SGX942 can be an excellent fit within our growing oncology portfolio, and expands our strategy to in-license programs that can potentially utilize accelerated development and regulatory pathways in China,” SciClone President and CEO Friedhelm Blobel, Ph.D., said in a statement.